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Everything posted by Jimbo

  1. THOUGHTS ON THE BEAR We realy have been in Bear mode since Archegos blew up in Feb 2021. Its working its way from the most frothy elements to the most basic. From Spacs to Walmart. Still has a while to run. The wealth transfer vehicles are being washed away by the tide of reality. Bonds are still for bagholders.
  2. 2022 - THE YEAR OF THE BAGHOLDER Yes as the year unfolds, 2022 is definitely the year of the bagholder....as all the cyptographers are finding out..... Stablecoins ....what a joke......ponzi coins in reality....... Yes the year reality came to ponziville. One presumes some sort of stock bear markety rally thingamebob whatever should probably break out about now. Ho Hum Ho Hum. On banks As doc says they are hiding massive bond losses (bagholder alert bagholder alert). Also deposit rates will have to be raised dramatically to keep the depositors from fleeing. Its not going to be pretty.
  3. THE FED AS A PRIMAL FINANCIAL CHAOS GOD When you think about it the FED is a financial chaos agent of the first order. By it distortion matrix it creates chaos in financial markets. It is the greatest pumper and dumper of financial (and real) assets of all time. Of course its great for speculators. All you have to do is front run the fed to make a fortune. Its easy to predict the future as a speculator with the FED as your very own chaos engine. I said bondholders were bag holders all last year. Because the 40% M2 print said so.
  4. WHAT A RIDE The SPXL ETF (3x leveraged index ETF) went from $19 to $146 from 20 March 2020 to 4 Jan 2021. What a rise !!!!!!!!!!!!! A 40% M2 print will tend to do that to a stock index. Particularly a leveraged one. And then it all fell apart. Thats what tapering the big print and instituting some QT (mostly synthetic QT) will do to an overvalued leveraged stock index.
  5. SYSTEM TO THE DOWN Still lots of overvalued stocks that need to be adjusted down to reality.
  6. THE GENERALS FALL ONE BY ONE First is was Meta platforms. Then it was Netflix The generals fall one by one. Where is the "Falling Generals ETF" to take advantage of this process.
  7. THE FED's TRASH TALKING QT The Fed will continue to trash talk QT while continuing to print to suppress interest rates. Why!!! Well think of the FED as a poker player with a losing hand. i.e. whatever action the FED takes long bonds must fall in value..... Mr market has a winning hand but the FED is trying through the use of trash talking QT to get them to fold. By folding I mean getting Mr Market to hold onto their losing long bond position. In this case to hold (long bonds) is to fold. And to fold (sell long bonds) is to hold. Mr Market needs to call the FED's bluff.
  8. THE SYNTHETIC QT CLUBBING And right on que the FED comes out and gives this bear market rally a good synthetic QT clubbing. (this is going to be their modus operandi for a while......a small dose of real QT mixed with a lot of synthetic QT) But they are still printing......... The cognitive disonance is large...... The FED wants to still print AND talk the stock market down...... They want the maximum of stock market fall for the minimum of interest rate increase.
  9. MORE THOUGHTS ON THE FED PUT As I have said before I dont think there is a stock level trigger. But there is a ten year treasury rate trigger...... I think its in the 4-5% band somewhere. As that is the where danger zone for large scale corporate default begins. Tripple Bs would then yield 6%. The FED will draw the line at large scale corporate defaults. The tripple B crowd must be protected. The FED doesnt like rate rises at all because all the debt in the system means it will create real damage. The SPAC crowd have largely been eliminated. We have seen the reaction to synthetic QT and it had not been pretty. Not pretty at all.
  10. ITS ALL ABOUT THE DEFAULT EVENT HORIZON RATE I dont think there is a stock market level that will trigger the FED put. 3700 or whatever...... (there is still 900 points to go before this is reached). I do think there is a level on the ten year treasury rate that will trigger the put.
  11. THE BERKSHIRE HATHAWAY ANNUAL LETTER Short and sweet for 2021. However I have one problem with it. The return table that accompanies it is never adjusted for inflation. So the 20% annual return since Warren took over is actually 15% real. And the 10% S&P return is actually 5% per annum. Which makes Warren look better as he actually outperforms the S&P by 300% after adjusting for inflation..
  12. ONE ETF (OR IS THAT 2) TO RULE THEM ALL And the outstanding ETF of this entire bull market since late 2008....... Has been SPXL. The Direxion 3 times leveraged bull S&P 500 ETF. A 28% return per annum from its founding on 5 November 2008. And the timing for its creation was just perfect. And the FED providing all the cheap leverage it needed...... PERFECT FRAME!!!!!! An ETF could not have been designed better to take advantage of the QE gravy train and ride the frame forces. But not anymore.....has lost 24% since the start of the year. But the SPXS the short alternative has gained 24%. Smart money has made the switch!!!!
  13. A SHORT HISTORY OF THE FED BALANCE SHEET Its all there...plain as day....in the chart of the FED balance sheet. When did it all start........ Most say in the bail outs of late 2008....... But perhaps we should look nearer.....in early 2018 when the FED tried to do a bit of QT So softly softly so the market wouldnt notice........ They propbably thought is was going real swell. But the hedge funds leveraged into treasuries certainly didnt think so....... The QT pushed the REPO rate they had to pay on their money up and up and up. The hedge funds could see their profits disappearing before there very eyes. Something had to be done about this obviously unacceptable situation. And so on 17 September 2019....a day that will live forever in financial infamy.... The REPO market printed 10%. And just like magic a $500 Billion REPO facility was created out of thin air to pour the healing balm on troubled waters. Was'nt that nice of the FED..... Even better the virus came along shortly afterwards.... crushed treasury rates and provided the perfect opportunity in April 2020 for the hedge funds to get out of thier leveraged bond positions and into stocks. Shortly afterwards the FED increased the money supply by 40%..... And its been up up up and away for the FED balance sheet ever since. Of course this created a lot of inflation and a lot of very over valued stocks. So the FED had to throw a few bones to the shorts after February 2021 with all its QT talk....... Though I find the FED's tough QT talk unconvincing. And its transitory inflation meme was just so ridiculous...... Then the FED created that nice Reverse Repo Program so all the hedge funds could hide in a house made out of bricks while the inflationary Wolf huffed and puffed and blew all the bonds and stocks down. All that FED QT tough talk really helped a lot..... And that folks is where we are now. Waiting for the real QT. But will it be GODOT QT???????????
  14. UNCLE WARREN AND THE BIG OXY COMMON BUY So Uncle Warren has bought a lot of Oxy. A stock I recomended months ago. Why???????? Well beside the oil price there is a very high J number on this stock The J number (which I invented) quantifies in a mathematical way the wealth transfer from lenders to borrowers (i.e the common shareholders) due to inflation. The FED is a monetary umpire. Unfortunately for Team Lender the FED is an umpire who now days only awards penalties to Team Borrower. Thus making it very hard for team lender to ever win a game (note I think they won a few games back in the early 1930's but thats about it). Anyway the J number is 30B debt plus 8B in preference shares multiplied by CPI. Or about $4 Billion a year that is being transfered to the borrowers (the common shareholders) from the lenders. So to get his $800 million back per annum (his preference share dividend which has been swallowed by inflation), Uncle Warren has to buy about 20% of Oxy. Should be fairly easy now he can exercise the warrants. I think thats his plan. Also you should note that inflation is driving Uncle Warren to use his cash pile. Inflation is a tax on cash and its become too expensive to hang on to. So he will spend it on stocks.
  15. A NEW FINANCIAL RATIO Bear market rally it looks to me. Anyway here is a financial ratio I invented. WTV/WCV That's the Wealth Transfer Vehicle (SPACS....) divided by Wealth Creation Vehicle (Commodity...Energy co's....) Ratio. In Bull markets it goes up. In Bear markets is goes down.
  16. A MARKET BIAS ADJUSTMENT PROCESS A market bias adjustment process in occurring. After all the bias matrix of the market is merely the sum of the bias matrices of all the "Investors". Each "investor" has their own bias matrix. Which we match against the bias matrix of the market. And the best bias matrix wins!!!! If your bias matrix is better at judging future reality than the markets bias matrix then you will produce alpha.
  17. LME VIX ET AL...... The house makes the rules. When you make the rules. Losing is optional. Heads I win....tails I cancel the trades.... Of course no one will play with you in the end. The LME has significantly impaired its franchise. A lot of commodity futures markets will get less liquid and more volatile because of the higher margin requirements.
  18. WINTER HAS COME FOR THE HOT HOUSE FLOWERS The ten year now above 2%. The temperature in the hot house is going down as the bond rate goes up. This is not good for the all the strange and artificial flowers in the hothouse that the master printer of the Eccles Temple had carefully cultivated. So many venus fly traps were cultivated to suck the "investors" ( a word that must always be put in commas and used very advisedly with a host of caveats). We should have a competition to decide what was the strangest flower....was it Virgin Galactic? was it AMC? was it one of the chinese fraudcaps? was it the Austrian 100 year bond?) They are wilting in the harsh sun of financial reality. Winter has come!!!!!!
  19. The invasion of the housing snatchers House prices now set by private equity. Just as stock prices set by pe house prices now set by pe. The FED has turned housing into an attractive investment for the PE crowd. All funded by the money printer and the magic of the 30 year mortgage.
  20. THE INTELLIGENT INVESTOR AND INFLATION Now that inflation is raging. As I predicted way back in March 2020. I was reading chapter 2 of the Intelligent Investor. The chapter on inflation just does not make the grade. It needs to be rewirtten and expanded. It does not address the issue of wealth trasfer via inflation from lenders to borrowers. A very important omission.
  21. A TALE OF THREE ARKS 1/ The ARK Fund This is a sinking ARK. 2/ The Reverse Repo Facility This is a leaking ARK...CPI every year. 3/ 10 Year Swiss Bond This would be quite a nice ARK. Only leaks Swiss CPI which is only 0.44% a year. However the SNB has said they wont let the franc appreciate against the dollar........thats really not nice of them. Somebody needs to put a wanted ad in the WSJ Wanted: Country with low inflation. Must have investment grade credit rating and central bank which is not allowed to print money at will and manipulate exchange rate.
  22. UNCLE WARREN RESCUES HIS OXY DEAL So Uncle Warren realises that the FED pulled a fast one on him re his Oxy deal. They changed the FRAME with their 40% M2 Print. Whats 8% interest on your prefs when inflation is 10%.....well its called going backwards. But sueing the FED wont work. So what can he do......he can buy cheap equity insurance.....by buying the common ....lots of common. He can have a frame congruent investment and have the frame forces work for him and not against him. If the value of his preference shares is to be transferred to the common shareholders due to the actions of the sacred printing machine contained in the Eccles monetary temple.........then he is going to make sure he is the common shareholder who benefits from that wealth transfer. Remember Oxy also has a lot of debt as well that is beng transfered...in real terms...to the common shareholders at a rate of CPI per annum. I would also like to make a point about Chapter 2 of the Intelligent Investor. I think the Chapter on inflation is rather cursory. Nowhere does it address the issue of inflationary transfer......a rather big ommission.
  23. A LESSON IN AUTOCRACY Investors are getting a valuable lesson in autocracy. Autocrats don't care about the financial bottom line. They only care about the power bottom line. Investors are expendable cannon fodder in their war for power. The only property rights an autocrat acknowledges are their own property rights. That's why there is so much capital flight from such countries. That's why returns appear so attractive in such countries. The higher return is in fact an asset confiscation insurance premium.
  24. WHAT IS PRICE?????? Price equals the function of information divided by time. Stock prices and any other asset prices are "particles" brought into being by the interaction of the information field with the time field. The information field acts on the time field to constanty alter the value of the price particle. However the information in the information field (both past information which is known and future information which is not curently known but is estimated) is viewed through the markets collective bias lense to determine the price value. This market bias lense unreasonably discounts the probabilities of certain events: It tends to ignore the probability of wars. It tends to ignore most fat tail events (see the writings of Nassim Taleb). It tends to ignore the lack of property rights and legal protections of those rights in certain countries. It tends to ignore acounting frauds/irregularities. It tends to ignore value metrics. It tends to ignore the fact that bubles and fads eventually end. The markets bias lense ignores a lot of things. It is constantly under weighting some types of information and over weighting others. Understand what the markets bias lense unfairly ignores and unreasonably discounts and you have an inbuilt advantage over the market. Your own individual investor lense needs to be clearer, less distorted and see farther than the markets lense.
  25. THE SWISS TEN YEAR BOND Pays 0.24% interest...swiss inflation rate 0.44% So you only lose 2% if your capital if you buy it. versus the US ten year where you are throwing away 60% of your capital.
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